CALGARY, March 14, 2016 /CNW/ – Altura Energy Inc. (“Altura” or the “Company”) (TSX Venture: ATU) is pleased to announce the results of the independent evaluation of the Company’s oil and natural gas reserves, effective December 31, 2015, as prepared by McDaniel and Associates Consultants Ltd. (“McDaniel”).
Altura’s audit of its 2015 annual financial statements is not yet complete and accordingly all financial amounts referred to in this news release are unaudited and represent management’s estimates. Readers are advised that these financial estimates are subject to audit and may be subject to change as a result.
2015 Independent Reserves Evaluation
On July 31, 2015 Northern Spirit Resources Inc (“NSRI”) closed a definitive reorganization and investment agreement allowing for, among other things, the appointment of a new management team and Board of Directors and the name change of NSRI to Altura. The new management team and Board of Directors have extensive experience in creating shareholder value through a focused full-cycle business plan and the current market environment is expected to provide an excellent opportunity to position Altura for profitable, long-term growth.
As part of this fresh start for Altura, McDaniel was newly appointed as the Company’s independent reserve evaluator on December 1, 2015 and evaluated Altura’s properties effective December 31, 2015 pursuant to a report dated March 2, 2016. The independent reserve evaluation was prepared in accordance with the definitions, standards and procedures contained in the Canadian Oil and Gas Evaluation Handbook (“COGE Handbook”) and National Instrument 51-101 (“NI 51-101”). The reserve evaluation was based on McDaniel’s forecast pricing and foreign exchange rates at December 31, 2015. The Reserves Committee of the Board and the Board of Directors of Altura have reviewed and approved the evaluation prepared by McDaniel.
Unless noted otherwise, reserves included herein are stated on a company gross basis, which is the Company’s working interest before deduction of government royalties and excluding any other additional royalty interests. This news release contains several cautionary statements that are specifically required by NI 51-101 under the heading “Reader Advisory” and throughout the release. In addition to the information contained in this news release, more detailed reserves information will be included in Altura’s Annual Information Form for the year ended December 31, 2015, which will be filed on SEDAR by April 30, 2016.
2015 Activity
Altura’s activity in 2015 was limited to drilling one horizontal well in the fourth quarter of 2015 at Klein North. The cost to drill, complete and equip the well was approximately $1.1 million. This well was assigned total proved and probable reserves of 126.7 Mboe, implying a finding and development cost of $8.68 per boe on a total proved and probable basis.
Company Gross Reserves as at December 31, 2015
The following table summarizes the Company’s gross reserve volumes at December 31, 2015 utilizing McDaniel’s forecast pricing and cost estimates outlined further below in this press release.
Company Gross Reserves(1)(2)(3) |
||||||
Category |
Light and |
Heavy Oil |
Conventional |
Natural Gas (Mbbl) |
Total (Mboe) |
|
Proved |
||||||
Developed Producing |
360.2 |
18.4 |
301.4 |
5.1 |
433.9 |
|
Undeveloped |
184.7 |
83.7 |
122.4 |
2.2 |
291.0 |
|
Total Proved(4) |
544.9 |
102.1 |
423.8 |
7.3 |
724.9 |
|
Total Probable |
446.5 |
132.6 |
317.7 |
5.4 |
637.5 |
|
Total Proved & Probable(4) |
991.4 |
234.7 |
741.5 |
12.7 |
1,362.4 |
(1) |
Gross reserves are Company working interest reserves before royalty deductions. |
(2) |
Based on McDaniel’s January 1, 2016 forecast prices. |
(3) |
Includes abandonment and reclamation costs as defined in NI 51-101. |
(4) |
Numbers may not add due to rounding. |
Future Development Capital (“FDC”) and Well Schedule
Total Proved |
Total Proved |
Total Proved & Probable |
Total Proved & Probable |
|||
2016 |
2,200.0 |
2 (2.0) |
2,200.0 |
2 (2.0) |
||
2017 |
1,283.1 |
2 (1.4) |
3,495.8 |
5 (4.5) |
||
2018 |
510.1 |
1 (0.6) |
3,462.3 |
3 (2.4) |
||
Total Undiscounted |
3,993.2 |
5 (4.0) |
9,158.2 |
11 (8.9) |
||
Total Discounted 10% |
3,556.0 |
7,832.0 |
(1) |
Numbers may not add due to rounding. |
Summary of Before Tax Net Present Values (“NPV”) as at December 31, 2015
Benchmark oil and NGL prices used are adjusted for quality of oil or NGL produced and for transportation costs. The calculated NPVs are based on McDaniel’s forecast pricing and foreign exchange rates at January 1, 2016 as outlined in the price forecast table further below in this press release. The NPVs include a deduction for estimated future well abandonment and reclamation but do not include a provision for interest, debt service charges and general and administrative expenses. It should not be assumed that the NPV estimate represents the fair market value of the reserves.
Before Tax Net Present Value ($000) (1)(2)(3) |
||||||
Discount Rate |
||||||
Category |
Undiscounted |
5% |
10% |
15% |
20% |
|
Proved |
||||||
Developed Producing |
10,326.8 |
9,155.2 |
8,199.4 |
7,432.2 |
6,812.5 |
|
Undeveloped |
5,488.0 |
4,262.5 |
3,335.0 |
2,638.3 |
2,109.2 |
|
Total Proved |
15,814.8 |
13,417.8 |
11,534.4 |
10,070.5 |
8,921.7 |
|
Total Probable |
17,282.1 |
12,565.7 |
9,459.4 |
7,355.9 |
5,879.0 |
|
Total Proved & Probable |
33,096.9 |
25,983.5 |
20,993.8 |
17,426.4 |
14,800.7 |
(1) |
Based on McDaniel’s January 1, 2016 forecast prices. |
(2) |
Includes abandonment and reclamation costs as defined in NI 51-101. |
(3) |
Numbers may not add due to rounding. |
Price Forecast
The reserve evaluation was based on McDaniel’s forecast pricing and foreign exchange rates at January 1, 2016 as outlined below.
WTI |
Western Canadian Select |
Alberta AECO |
Foreign Exchange |
|
2016 |
45.00 |
46.40 |
2.70 |
0.730 |
2017 |
53.60 |
54.40 |
3.20 |
0.750 |
2018 |
62.40 |
59.70 |
3.55 |
0.800 |
2019 |
69.00 |
66.30 |
3.85 |
0.800 |
2020 |
73.10 |
68.20 |
3.95 |
0.825 |
2021 |
77.30 |
72.30 |
4.20 |
0.825 |
2022 |
81.60 |
76.50 |
4.45 |
0.825 |
2023 |
86.20 |
80.90 |
4.70 |
0.825 |
thereafter |
+2.0%/yr |
+2.0%/yr |
+2.0%/yr |
0.825 |
Company Net Asset Value
The Company’s net asset value as at December 31, 2015 is detailed in the following table. This net asset value determination is a “point-in-time” measurement and does not take into account the possibility of Altura being able to recognize additional reserves through successful future capital investment in its existing properties beyond those included in the 2015 year-end reserve report.
Before Tax NPV @ 10% Discount Rate |
||
($000) |
($/Share) |
|
Developed Producing(1)(2) |
8,199.4 |
0.08 |
Total Proved(1)(2) |
11,534.4 |
0.11 |
Total Proved & Probable(1)(2) |
20,993.8 |
0.19 |
Undeveloped acreage(3) |
2,353.1 |
0.02 |
Working capital surplus(4) |
22,128.8 |
0.20 |
Net asset value (basic)(5)(6) |
45,475.7 |
0.42 |
(1) |
Evaluated by McDaniel as at December 31, 2015. Net present value of future net revenue does not represent the fair market value of the reserves. |
(2) |
Net present values are based on McDaniel’s January 1, 2016 price forecast. |
(3) |
Undeveloped acreage has been valued internally by Altura at an average of $100 per acre over 23,531 net undeveloped acres. |
(4) |
Working capital surplus as at December 31, 2015 (estimated and unaudited). |
(5) |
Net asset value is the sum of Proved and Probable reserves, undeveloped acreage and working capital surplus. Numbers may not add due to rounding. |
(6) |
Basic shares as at December 31, 2015 totaled 108,920,973 common shares. |
About Altura Energy Inc.
Altura Energy Inc. is a public oil and gas Company active in the exploration and development of oil and natural gas in east central Alberta.